Infrastructure Financing and Leasing Services Ltd (IL&FS) on Saturday proposed a three-part turnaround strategy to its shareholders.

The revival plan seems to have got support from the two principal investors in the company — the Life Insurance Corporation and Orix Corp of Japan — who are said to have agreed to subscribe to a proposed Rs 4,500-crore rights issue, which is part of the three-pronged strategy.

It is learnt that the State Bank of India, which is also a shareholder of IL&FS, could also subscribe to the rights issue.

Following a closed-door annual general meeting with more than two dozen shareholders on Saturday, IL&FS managing director Hari Shankara said the company’s strategy has three parts.

“To successfully complete the ongoing rights issue to enable the company to recapitalise itself; to sell assets and repay our creditors; and third is to be able to get liquidity to repay our debtors till our asset sale cycle begins,” he said.

“These strategies were explained in some detail to our shareholders and I ended the (meeting) by seeking their support for our proposal,” Shankara said in a video message circulated to reporters after the meeting.

“I am very hopeful that we are able to meet their expectations,” he added.

Shankara further said specialist agency Alvaraz & Marshal had been appointed to formulate a turnaround strategy for the company.

A string of defaults by IL&FS has roiled India’s financial markets over the past month and sparked fears of a crisis in the non-banking financial services sector.

A Reuters report quoted four shareholders who said the company management was grilled with multiple questions on its credit obligations and timelines for asset sales — which some analysts have said could take months to over a year.

IL&FS, which is under Rs 91,000 crore ($12.55 billion) of debt, had previously said 14 of its 25 assets had seen interest from buyers, and that it planned to raise up to Rs 30,000 crore through asset sales.

Sankaran also told the meeting that the company was in discussion with the government and the RBI to put in place a legal framework before it could sell assets.

“They have kept a timeline of 45 days to get the legal framework in place to sell assets,” a shareholder said.

IL&FS hopes to raise Rs 12,000-16,000 crore by selling its transport business (ITNL), the shareholder added. As many as 14 out of the 19 road projects of ITNL have been completed and are saleable, they said.

It is also in talks with lenders to open a fresh line of credit, seek an extension for upcoming debt payments, and secure bridge financing to avoid further defaults.

Most of the people who spoke to the media are preference shareholders and most of them are against distress sale of assets. “As an investor I

am scared. They did not give any concrete answers. My father had done the mistake of investing in it,” said a shareholder.

IL&FS is often called a quasi-sovereign company because India’s biggest insurer, the Life Insurance Corporation of India (LIC), owns a 25.34 per cent stake in it.

One of the agenda at the meeting was to raise the borrowing limit to Rs 35000 crore. Another item on the agenda was to raise the authorised capital to over Rs 1,600 crore from Rs 1,500 crore.

Another shareholder said the management also hinted at retrenchments as well as salary and bonus cuts to reduce cost.

A shareholder told reporters that both Orix and the LIC would subscribe to the issue that would raise their ownership in the company.

As of March 31, 2018, while the LIC held a 25.34 per cent stake, Orix had 23.54 per cent, while the SBI held 6.42 per cent. The rest is held by Abu Dhabi Investment Authority, IL&FS Employees Trust, the Central Bank of India, HDFC and India Discovery Fund.

While the Central Bank of India, among the investors, cannot subscribe to the rights issue because it is under the prompt corrective action framework of the RBI, HDFC and Abu Dhabi Investment Authority are not keen on participating in the issue.

The development comes a day after RBI deputy governors N.S. Vishwanathan and M.K. Jain met representatives of the LIC and Japan’s Orix Corporation and reportedly asked them to ensure the systematically important NBFC does not go belly up.